Shopify Profit Margin Calculator
Enter what one order costs you and see what you actually keep. This counts the four things Shopify's own margin figure leaves out: shipping, transaction fees, advertising and everything else you pay to fulfil an order.
Net profit margin
39.8%
At 39.8% you keep $35.42 per order - strong for DTC. Margins this healthy usually mean there is room to spend harder on acquisition.
- Net profit per order
- $35.42
- Total cost per order
- $53.58
- Contribution before adsWhat this order has available to spend acquiring the customer.
- $53.42
- Gross margin (COGS only)
- 72.5%
- Transaction fee
- $2.58
This is one order. StoreProfit calculates it automatically for every order in your store - per product, per channel, per day - including the fees that never appear in Shopify Analytics.
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How this is calculated
Net profit = Selling price - COGS - Shipping - Transaction fee - Ad spend - Other costsTransaction fee = Selling price x Fee rateNet profit margin = Net profit / Selling price x 100- Selling price
- What the customer pays for the product itself, before tax and before any shipping you charge them.
- COGS
- The landed cost of the unit: supplier price plus freight, duty, inbound handling and packaging. Using the supplier invoice alone is the most common way this calculation goes wrong.
- Shipping
- Your net outbound cost. If the customer paid $5 towards $12 of postage, enter $7.
- Transaction fee
- The percentage your payment provider takes. The fixed per-transaction fee is handled separately in the fees calculator, where the plan and country are known.
- Ad spend per order
- Total advertising spend for the period divided by total orders in that period. Blended, not platform-attributed, because attributed numbers double-count.
- Net profit margin
- Net profit as a percentage of the selling price. This is the number to manage a store on, and it is always lower than gross margin.
Worked example
A skincare brand sells a serum at $89. Here is what one order actually leaves behind:
| Selling price | $89.00 | |
|---|---|---|
| COGS | - $24.50 | $21.10 unit cost plus $3.40 freight and duty |
| Shipping | - $7.20 | $11.20 postage, customer paid $4.00 |
| Transaction fee (2.9%) | - $2.58 | $89.00 x 0.029 |
| Ad spend | - $18.00 | $36,000 spent over 2,000 orders |
| Other costs | - $1.30 | Insert card, apps, returns provision |
| Net profit | $35.42 | |
| Net profit margin | 39.8% | $35.42 / $89.00 |
The gross margin on this product is 72.5%, which is the number that appears in most reporting. The net margin is 39.8%. Both are true; only one of them pays the rent.
What counts as a good net margin
For a DTC store buying paid traffic, a net margin of 15-25% per order is normal and sustainable. Above 30% usually means either a genuinely differentiated product or an unusually strong organic and repeat mix. Below 10% is fragile: a single bad ad fortnight, a freight rate increase or a supplier price rise takes the whole thing to zero, and you find out months later because the P&L lags.
The number that matters more than the margin percentage is the contribution before ads, shown above. That is the cash each order releases to buy the next customer. Two stores can both run 20% net margins while one has $12 of contribution and the other has $60, and the second one can outbid the first for every customer they both want.
What actually moves it
In order of leverage for most stores: landed cost, average order value, then ad efficiency. Landed cost is first because it applies to every unit forever and compounds with volume, and because most stores have never renegotiated freight or duty classification. A 6% reduction in landed cost on the example above adds $1.47 to every order, permanently, with no ongoing effort.
Average order value is second because the fixed components of an order - the flat part of the payment fee, the pick-and-pack labour, the box, the acquisition cost - do not scale with basket size. Moving AOV from $89 to $110 with a bundle raises net profit far more than 24%, because most of that extra $21 is not accompanied by extra cost.
Ad efficiency is third, not because it does not matter but because it is the least durable. A ROAS improvement from a creative refresh decays. A supplier renegotiation does not.
The mistake almost everyone makes
Calculating margin on the supplier invoice price and calling it COGS. The invoice is usually 65-80% of the true landed cost once sea freight, duty, inbound handling, packaging and defect rates are included. A store running on invoice-price margins believes it is at 45% when it is at 33%, and the gap is invisible until a cash flow problem surfaces.
The second mistake is using platform-reported ad spend attribution rather than blended spend. Meta, Google and TikTok each claim credit for overlapping orders, so their attributed revenue can add up to more than the store actually made. Dividing total spend by total orders is cruder and correct.
The third is forgetting returns. If 8% of orders come back and half of those units cannot be resold, that is a real per-order cost that belongs in this calculation, not a footnote at year end.
Questions people ask
What is the difference between gross margin and net margin?
Gross margin subtracts only the cost of the goods. Net margin subtracts everything it takes to get the order out of the door: shipping, payment fees, advertising and overhead. Gross margin is useful for pricing decisions; net margin is what determines whether the business makes money.
Should I include my Shopify subscription in this?
Not per order, no. Subscriptions, salaries and rent are fixed costs that do not vary with each order, so including them here distorts the per-order picture. Work out net margin per order first, then subtract fixed costs from total contribution to get to actual profit.
Do I use the price before or after discounts?
After. Enter what the customer actually paid. If you discount heavily, run the calculation twice - once at full price and once at your typical discounted price - because the second number is usually the one that reflects reality.
What net margin do I need to be profitable overall?
Enough contribution across all orders to cover your fixed costs and leave something over. A store doing 800 orders a month at $35 net profit generates $28,000 of contribution; if fixed costs are $18,000 the business makes $10,000. The per-order margin percentage on its own does not tell you this - the volume behind it does.
Why is my margin different every month?
Usually ad efficiency and product mix. The same store can run 25% one month and 12% the next purely because a lower-margin product sold well or CPMs rose. This is why per-product and per-order margin matters more than a single blended figure.
Last updated August 10, 2026